RNS Number:6328M
enterpriseAsia PLC
23 June 2003
ENTERPRISEASIA PLC
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
CHAIRMAN'S STATEMENT
RESULTS
The Company and its subsidiaries recorded an audited consolidated loss of #8,094,754 for the year ended 31 December
2002 (the "Year") (2001: #1,176,806). Of this loss #7,386,576 resulted from the provisions for permanent diminution in
the value of several investment projects in our portfolio (2001: #494,614) and #89,711 was due to exchange losses.
As at 31 December 2002, the audited net asset value per share was 0.70p (2001: 4.07p), and the total cash balance under
control was approximately 0.58p per share.
DIVIDENDS
The directors do not recommend the payment of a dividend.
BUSINESS STRATEGY
The Company faced a difficult year in 2002, with all investee projects under-performing, in particular those heavily
depending on the Hong Kong economy which further deteriorated towards the end of the Year. Most of the projects also
experienced shortage of funds, and it seemed increasingly unlikely that they would be able to sustain themselves into
the medium term.
Your directors took the view that, in the light of these difficult conditions, the Company should not provide any
further seed funding to the existing portfolio but, instead, concentrate on developing alternative strategies capable
of delivering shareholder value.
To that end, your directors still take the view that the Greater China region offers significant potential despite the
recent negative climate created following the outbreak of the SARS epidemic. Whilst there are certainly weaknesses in
the region's progress, your board believes that political and economic developments in Mainland China, Hong Kong and
Taiwan will continue to drive the need for a more open market and, with that, an increasing acceptance of western
disciplines in business practice.
Your board believes, therefore, that the Company can still benefit from its strong position in the market, i.e. a U.K.
company with an in-depth knowledge of, and excellent connections in, the Greater China market. This strength is
particularly advantageous, we believe, as China leans towards western education and business methods, so your Company's
strategy will increasingly focus on the education sector. As before, your Company will not look only at Greater China
if opportunities arise in other markets for profitable investment and increased credibility in the sector, but China
will remain our core market.
Your directors are aware that, as part of the successful implementation of our new strategy, it is vitally important
that we contain our operating costs. Substantial cost cutting measures, including downsizing of our Hong Kong
operations and significant reduction in directors' fees, began in the Year and their impact is expected to be
progressively reflected in 2003.
Despite all our difficulties, therefore, I look forward with renewed confidence to the future and I should like to
record my sincere thanks to all my fellow directors and our management team for their committed efforts during such an
extraordinary period. I would also like to welcome Mr. Ka Hang Lai as our new non-executive director since September
2002.
Peter So
Chairman
16 June 2003
YOUR INVESTMENT PORTFOLIO
Value Convergence Holdings Limited ("VC Holdings")
Formerly known as iAsia Technology Limited, in December 2002, VC Holdings broadened its business scope from a
securities trading systems developer and marketer to become a financial services provider, through the acquisition of 3
CEF companies in brokerage, futures and corporate finance (the "CEF Acquisition").
The CEF Acquisition was funded by a rights and bonus share issue in early 2003, to which we did not subscribe in order
to preserve the Company's cash resources. As a result of the rights and bonus share issue, and the private placement
of a substantial amount of new shares in July 2002, our shareholding in VC Holdings is now reduced to approximately
1.78%, and the value of our investment in VC Holdings has been written down to a level reflecting approximately
HK$0.0714 per share.
Net Fun Limited ("Net Fun")
Net Fun provides interactive educational games for teenagers and children. The project's strategy of developing its
products and marketing in Mainland China, by means of local management and partnerships, is beginning to show some
early signs of effectiveness as cash inflows from revenue start to take shape under limited funding support.
The online services offered by Net Fun are now accessible in about 8,000 households in residential estates developed
and managed by the Cheung Kong Group of Companies, which also has interests in Net Fun.
Cybermax Network Technology Limited ("Cybermax")
Cybermax owned the domain name "Part-time.com" and developed businesses in relation to recruitment advertising for
part-time, temporary and second jobs. The Hong Kong website of Part-time.com was officially launched in April 2001
but was not successful. In February 2003 the directors of Cybermax resolved to terminate its Hong Kong operations as a
result of a declining trend in recent sales performance and the failure to secure additional funding.
We invested HK$15 million into the equity of Cybermax, and in 2002 we provided a total of HK$3.539 million of
additional loan financing to the project. HK$3 million of this loan was secured. As a result of the termination of
the Part-time.com operations in Hong Kong, we have now written off all of our investment in, and loan to, Cybermax. As
a secured creditor, we have also appointed a receiver to facilitate acquisition of some remaining assets of Cybermax,
including a collection of domain names related to the Part-time.com business.
innoVision Holding Limited ("innoVision")
innoVision manufactures and markets a new form of multiple visual light-box for advertising use. Its sales office and
production plant are based in Guangzhou in southern China.
innoVision's sales was disappointing and it had no further cash resources by early 2003. Therefore, we disposed of our
interests in innoVision to parties based in Guangzhou in March 2003. The consideration consisted of both cash and
receivables, and the maximum realizable value of the total consideration is estimated at approximately HK$160,000. As
a result of the disposal, we have now written off all our investment in innoVision.
P & S International Limited ("P & S")
P & S is based in Wuhan in central China, and is involved in the development of semiconductor chips for connecting
appliances and equipment with the Internet. The project's progress has not been satisfactory, so we do not expect it
to be able to achieve its original business plans and have now fully written off this investment.
UFO Solutions Limited ("UFO")
The shareholders of UFO have decided to terminate the project in the absence of alternative business opportunities. No
provision by the Company will be required upon UFO's dissolution.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2002
Year Year
ended ended
31 December 31 December
2002 2001
Notes # #
Turnover
Gain on disposal of investment - 22,800
Consultancy fee income 85,996 -
------- -------
85,996 22,800
Administrative expenses (825,400) (849,688)
Impairment loss on investments (7,386,576) (494,614)
Provision for doubtful debts (45,228) -
------- -------
(8,171,208) (1,321,502)
Other operating income 33,561 38,722
------- -------
Operating loss (8,137,647) (1,282,780)
Other interest receivable and similar
income 42,893 105,974
------- -------
Loss on ordinary activities before (8,094,754) (1,176,806)
taxation
Tax on loss on ordinary activities - -
------- -------
Loss on ordinary activities after 8 (8,094,754) (1,176,806)
taxation
------- -------
2002 2001
Pence Pence
Basic loss per share 8 3.38 0.49
------- -------
Diluted loss per share 8 3.38 0.49
------- -------
The profit and loss account has been prepared on the basis that all operations are continuing operations
There are no recognised gains and losses other than those passing through the profit and loss account.
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2002
2002 2001
Notes # # # #
Fixed assets
Tangible assets 2 11,588 9,008
Investments 3 310,841 8,655,923
------- -------
322,429 8,664,931
Current assets
Debtors 5 75,547 71,105
Investments 4 2,336,676 1,149,334
Cash at bank and in hand 1,377,960 1,276,848
------- -------
3,790,183 2,497,287
Creditors: amounts falling due
within one year 6 (2,447,317) (59,092)
------- -------
Net current assets 1,342,866 2,438,195
------- -------
Total assets less current 1,665,295 11,103,126
liabilities
Creditors : amount falling due after
more than one year 7 - (1,343,077)
------- -------
1,665,295 9,760,049
------- -------
Capital and reserves
Called up share capital 2,395,985 2,395,985
Share premium account 9,175,770 9,175,770
Profit and loss account (9,906,460) (1,811,706)
------- -------
Shareholders' funds - equity
interests 1,665,295 9,760,049
------- -------
The Board approved the financial statements on 16 June 2003.
Benjamin Ng Phillip Brown
Director Director
BALANCE SHEET
AS AT 31 DECEMBER 2002
2002 2001
Notes # # # #
Fixed assets
Tangible assets 2 131 318
Investments 3 1,667,998 10,585,250
------- -------
1,668,129 10,585,568
Current assets
Debtors 5 12,797 -
Cash at bank and in hand 711,242 978,574
------- -------
724,039 978,574
Creditors: amounts falling due
within one year
6 (598,548) (583,591)
------- -------
Net current assets 125,491 394,983
------- -------
Total assets less current
liabilities
1,793,620 10,980,551
------- -------
Capital and reserves
Called up share capital 2,395,985 2,395,985
Share premium account 9,175,770 9,175,770
Profit and loss account (9,778,135) (591,204)
------- -------
Shareholders' funds - equity
interests 1,793,620 10,980,551
------- -------
The Board approved the financial statements on 16 June 2003.
Benjamin Ng Phillip Brown
Director Director
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2002
Year Year
ended ended
31 31 December
December
2002 2001
# #
Net cash outflow from operating activities (688,957) (878,870)
Returns on investments and servicing of finance
Bank interest received 28,903 99,805
Other interest income 13,990 6,169
------- -------
Net cash inflow for returns on investments and
servicing of finance 42,893 105,974
Capital expenditure and financial investment
Payments to acquire tangible assets (7,249) (7,732)
Payments to acquire fixed asset investments (316,586) (1,534,210)
------- -------
Net cash outflow for capital expenditure (323,835) (1,541,942)
------- -------
Net cash outflow before management of liquid
resources and financing (969,899) (2,314,838)
Financing
Loan from investee company 1,071,011 -
------- -------
Net cash inflow from financing 1,071,011 -
------- -------
Increase/(decrease) in cash in the period 101,112 (2,314,838)
------- -------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2002
1 Accounting policies
The financial statements have been prepared under the historical cost convention and are in accordance with
applicable accounting standards. There has been no change in the accounting policies during the current
year and they are consistent with those set out in the financial statements for the year ended 31 December
2001. The following principal accounting policies have been applied:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of enterpriseAsia plc and all of
its subsidiary undertakings made up to 31 December 2002. Uniform accounting methods are used to consolidate
the results of subsidiary undertakings in the group financial statements.
2 Tangible fixed assets
GROUP COMPANY
Leasehold Furniture and Office Total Office
improvements fixtures equipment equipment
# # # # #
Cost
Balance at 1 January 2002 - - 13,277 13,277 568
Additions 3,909 1,800 1,540 7,249 -
------- ------- ------- ------- -------
At 31 December 2002 3,909 1,800 14,817 20,526 568
------- ------- ------- ------- -------
Depreciation
Balance at 1 January 2002 - - 4,269 4,269 250
Charge for the period 163 37 4,469 4,669 187
------- ------- ------- ------- -------
At 31 December 2002 163 37 8,738 8,938 437
------- ------- ------- ------- -------
Net book value
At 31 December 2002 3,746 1,763 6,079 11,588 131
------- ------- ------- ------- -------
Net book value
At 31 December 2001 - - 9,008 9,008 318
------- ------- ------- ------- -------
3 Fixed asset investments
Company
2002 2001
# #
Shares in group undertakings
-subsidiary undertakings 10,584,251 10,584,251
-provision for impairment in the year (8,917,252) -
------- -------
1,666,999 10,584,251
Loans to group undertakings
-subsidiary undertakings
999 999
------- -------
1,667,998 10,585,250
------- -------
Loan to group Shares in group
undertakings undertakings
# #
Cost at 1 January 2002 999 10,584,251
Additions - -
Provision for impairment during the year - (8,917,252)
------- -------
At 31 December 2002 999 1,666,999
------- -------
The amounts due from subsidiary undertakings are secured, interest free and repayable after one year.
Information on principal subsidiary undertakings:
Name of company Country of Class of share Proportion of the Nature of
incorporation / held nominal value of equity business
registration held by the
Group Company
% %
enterpriseAsia Limited Hong Kong Ordinary - 100 Investment
holding
enterpriseAsia.com (B.V.I.) British Virgin Ordinary - 100 Investment
Limited Islands holding
Alternative Enterprises British Virgin Ordinary 100 - Investment
Limited Islands holding
Cable First Holdings British Virgin Ordinary 100 - Investment
Limited Islands holding
Electronic Commerce Limited British Virgin Ordinary 100 - Investment
Islands holding
Electronic Industries British Virgin Ordinary 100 - Investment
Limited Islands holding
E-Market Assets Limited British Virgin Ordinary 100 - Investment
Islands holding
E-Force Enterprises Limited British Virgin Ordinary 100 - Investment
Islands holding
Jobpro International British Virgin Ordinary 100 - Investment
Limited Islands holding
enterpriseAsia Consultants British Virgin Ordinary 100 - Provision of
Limited consultancy
Islands services
Group
Listed Unlisted Convertible loans Secured loans Unsecured loans Total
investments investments
# # # # # #
Cost
1 January 2002 2,660,429 6,251,074 130,501 - - 9,042,004
Additions - 57 44,581 263,700 8,248 316,586
Reclassification to
current assets - (1,275,092) - - - (1,275,092)
------- ------- ------- ------- ------- -------
At 31 December 2002 2,660,429 4,976,039 175,082 263,700 8,248 8,083,498
------- ------- ------- ------- ------- -------
Provision for impairment
At 1 January 2002 - 255,580 130,501 - - 386,081
Provision for
impairment loss 2,388,957 4,681,090 44,581 263,700 8,248 7,386,576
------- ------- ------- ------- ------- -------
At 31 December 2002 2,388,957 4,936,670 175,082 263,700 8,248 7,772,657
------- ------- ------- ------- ------- -------
Net book value
At 31 December 2002 271,472 39,369 - - - 310,841
------- ------- ------- ------- ------- -------
At 31 December 2001 2,660,429 5,995,494 - - - 8,655,923
------- ------- ------- ------- ------- -------
Information on the listed investments:
Listed investments as at the year end consisted of the following:
Name of company Place of incorporation Class of shares held Proportion of nominal value of
issued capital held by the group
Value Convergence Holdings
Limited Hong Kong Ordinary 6.24%
(formerly iAsia
Technology Limited) (2001: 7.49%)
The market value of 42,470,227 shares of Value Convergence Holdings Limited at 31 December 2002 was #271,492
(2001:#1,913,665).
Information on the unlisted investments:
Name of company Country of incorporation/ Class of Proportion of Nature of business
registration shares held nominal value of
issued capital
held by the
group
iBASE Holdings Limited Hong Kong Ordinary 49% E-commerce business solutions
P & S International Limited Hong Kong Ordinary 2.18% Design and marketing of
semi-conductor chips
Net Fun Limited Hong Kong Ordinary 8% Games provider
Cybermax Network Technology Hong Kong Ordinary 49% Recruitment advertising
Limited
innoVision Holding Limited Hong Kong Ordinary 49% Advertising
"A"
Information on the loans:
Convertible loans
The convertible loans comprise of two loans.
The first is a convertible loan of HK$1,500,000 (#130,501) due from iBASE Holdings Limited to the company's
subsidiary, Alternative Enterprises Limited. It is unsecured and interest will accrue on any outstanding loan
amount on a daily basis at the prevailing Hong Kong Dollar prime lending rate less two percentage points, and is
repayable in full, together with all the interest in arrears, on 18 January 2004.
The second was a transaction during the year. The company's subsidiary, Jobpro International Limited ("Jobpro"), has
entered into a loan agreement with its investee company, Cybermax Network Technology Limited ("CNT"), for granting an
unsecured convertible loan of HK$490,000 (#44,581). The loan is interest bearing at prime rate per annum as quoted
by The Hongkong and Shanghai Banking Corporation Limited and repayable within 30 days after the occurrence of
relevant events as stated in the loan agreement.
Secured loans
Cable First Holdings Limited ("Cable First"), a subsidiary of the company, has entered into a loan agreement with CNT
for granting a secured loan of maximum HK$4,000,000 (#343,607) of which HK$3,000,000 (#263,700) has been granted
during the year. The loan is secured and interest bearing at prime rate per annum as quoted by The Hongkong and
Shanghai Banking Corporation Limited. Details of the loan arrangement are as follows:
Stage Drawdown date Amounts Due date
Loans in HK$ # equivalent
A 28 January 2002 2,000,000 181,227 31 January 2004
B 9 October 2002 1,000,000 82,473 30 June 2005
Stage Expected drawdown date Amounts Due date
Loans in HK$ # equivalent
C 30 September 2002 or * 1,000,000 79,907 30 September 2005
*The loans will be drawn down when the drawing conditions as stated in the loan agreement are fulfilled or satisfied.
Unsecured loans
During the year an unsecured loan of HK$49,000 (#4,332) has been granted to CNT by Jobpro. This loan is non-interest
bearing and non-repayable except and until the situation of winding up of CNT.
During the year an unsecured loan of HK$49,000 (#3,916) has been granted by the company's subsidiary, Electronic
Commerce Limited to innoVision Holding Limited ("iV"). This loan is non-interest bearing and non-repayable except
and until the situation of liquidation or winding up of iV.
4 Current asset investments
Group Group Company Company
2002 2001 2002 2001
# # # #
Unlisted investments 2,336,676 1,149,334 - -
------- ------- ------- -------
2,336,676 1,149,334 - -
------- ------- ------- -------
Included within Investments under current assets is a 49.87% interest in the ordinary shares of UFO
Solutions Limited and a 100% interest in the ordinary shares of ecAgent.com Limited. Both companies are
in the process of being liquidated The current asset value is the lower of cost and net realisable
value. Upon liquidation the proceeds realised by the group are expected to be sufficient to repay all
the loans due from the group to these investee companies, which amounted to HK$28,414,427 (#2,414,088)
as at 31 December 2002.
During the year, the investment in 10,000 equity shares of ecAgent.com Limited was transferred from
Behaviour International Limited, a wholly beneficially owned subsidiary, to another wholly owned
subsidiary, enterpriseAsia Limited, for a consideration of HK$14,559,258 (#1,259,547). This transaction
has been eliminated from the group's results.
5 Debtors Group Group Company Company
2002 2001 2002 2001
# # # #
Trade debtors 12,613 14,920 - -
Other debtors 1,110 1,126 - -
Prepayments and accrued income 61,824 55,059 12,797 -
------- ------- ------- -------
75,547 71,105 12,797 -
------- ------- ------- -------
6 Creditors: amounts falling due within one year Group Group Company Company
2002 2001 2002 2001
# # # #
Trade creditors 4,663 14,908 1,669 7,990
Other creditors 2,414,486 5,364 571,607 557,019
Accruals and deferred income 28,168 38,820 25,272 18,582
------- ------- ------- -------
2,447,317 59,092 598,548 583,591
------- ------- ------- -------
Included within other creditors are amounts due to two investee companies, ecAgent.com Limited and UFO
Solutions Limited, of HK$28,414,427 (#2,414,088). These investee companies have entered into voluntary
liquidation and the amounts due to them are expected to be fully repaid upon capital repayment from these
companies during liquidation.
Group Group Company Company
2002 2001 2002 2001
# # # #
7 Creditors: amounts falling due after more than
one year
Loan from investee company - 1,343,077 - -
------- ------- ------- -------
- 1,343,077 - -
------- ------- ------- -------
8 Loss per share
2002 2001
# #
Loss before taxation 8,094,754 1,176,806
------- -------
Weighted average number of shares in issue 239,598,496 239,598,496
Dilution effect of share in options - -
------- -------
Diluted weighted average number of shares 239,598,496 239,598,496
------- -------
Basic loss per share (pence) 3.38 0.49
------- -------
Diluted loss per share (pence) 3.38 0.49
------- -------
9 Publication of non-statutory accounts
The financial information set out in this preliminary announcement does not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985.
The consolidated balance sheet as at 31 December 2002 and the consolidated profit and loss account,
consolidated cash flow statement and associated notes for the year have been extracted from the Group's
financial statements. The auditors have reported on those financial statements and issued an
unqualified report which did not contain a statement under s237(2) or (3) of the Companies Act 1985.
The financial statements have not yet been filed at the Registrar of Companies. The 2001 accounts have
been delivered to the Registrar of Companies and the auditors reported on them, their report was
unqualified and did not contain a statement under s237(2) or (3) of the Companies Act 1985.
The Annual Report and Accounts will be posted to all shareholders on 26 June 2003 and will be available
at the company's registered office thereafter.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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